Questions about a license tag

Gooch03

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Alright well I sold my truck and no longer have a car payment. Feels GREAT. Anyhow I bought a 96 Mustang GT vert (I know, its god awfully slow) but it was from the original owner, clean title, less than 100k on it, and runs great all for $1500 so I couldn't pass it up. Anyways the title the guy gave me isnt the latest title so we are waiting on the bank to send us the latest title so I can drive it and when I went to the tag office today to get my tag off my truck they made it invalid and tossed it because it expires the end of this month and I had no vehicle to put it on at the time. I didn't know they could do that, is this right?
 

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